Residential transactions drop in August – HMRC

Residential property sales fell 0.5% from July to August, according to provisional government figures.

The provisional seasonally adjusted count for August 2017 was 103,490 residential transactions. This is 0.5% lower than in July this year.

However, on a non-adjusted basis, residential transactions were around 6.6% higher than July 2017 and 5.6% higher than in August 2016.

HMRC cautioned that the comparison with last summer is unwise as the outcome of the general election and EU referendum are likely to have changed behaviour. It added that the August 2017 figures were similar to the same month in 2015.

Jeremy Duncombe, director of the Legal & General Mortgage Club, said the figures remain strong in the face of global uncertainty, but that homeowners are choosing to improve their properties rather than move.

“With affordability restrictions from lenders and large stamp duty bills on many homes, homeowners are deciding to extend their properties to cater for their growing families, rather than starting their property search from scratch,” he said.

This is backed by figures from supply chain community GS1 UK showing 150% year-on year increase in home improvement companies registering with the organisation.

“Last time buyers also continue to face difficulties downsizing, with a lack of suitable properties to move into, and ultimately this is creating choke points in the housing market that make it harder for first-time buyers to take their first step and second steppers to move up the ladder,” said Duncombe.

He added that more should be done to tackle the barriers. While government is focused on house building he said Stamp Duty is still a real deterrent to moving home and freeing up existing housing stock.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said government won’t want to see a substantial reduction in activity for long.

“If the numbers aren’t there in terms of transactions it is not good for the economy and certainly not good for the housing market,” he said.

“These figures aren’t surprising when you consider they reflect the period over the summer when the market was relatively quiet and also the figures from last year when the market was in the doldrums.”

Jonathan Harris, director of mortgage broker Anderson Harris, added: “Summer is always quieter for the housing market as people go on holiday and put off making decisions about buying and selling. Many have come back from their holidays with a renewed determination to get on and move, with business picking up this month – a trend we hope will continue throughout the autumn.”

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